New BUY Recommendation: DAC Technologies Group Int’l

The five stocks that we recommended in 2009 have done very well so far. At today’s closing prices, our five recommendations: Hemispherx Biopharma (HEB), Orsus Xelent (ORS), Boots & Coots (WEL), Acme United (ACU) and Global Green Solutions (GGRN) are up between 30 and 370 percent, or +127% on average.

Obviously, it’s impossible to predict if our following recommendations will equal that performance. Nevertheless, we believe our next pick is much undervalued and has a fair chance to appreciate significantly the coming quarters.

During the first six months of 2009, DAC Technologies (DAAT – $0.85) showed significant sales and earnings growth for which there were two main contributors. First of all, there was a major decrease in commodity prices compared with 2008 and secondly, sales for the Company’s gun cleaning and maintenance and gun safety products increased 43% compared with last year.

In July of 2009, DAC Technologies was selected as “Company of the Month” in the July 2009 edition of The Bowser Report. The Bowser Report, published by Max Bowser, is one of the top performing investment newsletters specializing in small cap stocks and was selected as one of the top ten newsletters in 2005 by the Hulbert Financial Digest.

Early September of 2009, the Company received its largest purchase order in its 16 year history. The purchase order from Wal-Mart is for a deluxe gun cleaning kit and is well in excess of seven figures.

DAAT Technologies has a clean balance sheet as it has a current ratio of 3.16, shareholder equity of almost $5.3 million and NO long term debt.

DAC sells its gun cleaning kits and accessories to Wal-Mart under the famous Winchester brand name. The Company is currently looking to expand its offerings under the Winchester name.

Management recently raised its guidance for fiscal year 2009 from 12 to 14 cents earnings per share to 14 to 16 cents per share on sales of $16 to $18 million.

Based on the information described in this report, we believe DAC Technologies’ shares are substantially undervalued at current prices. We are initiating coverage of DAAT with a BUY rating and a $1.82 per share price target, which is more than double today’s stock price.

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1. Click here for our previous updates on Acme United.
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